Buy/Sell Tax
By CoinGecko | Updated on Feb 21, 2022
It is possible to code a smart contract token to have an innate on-chain "tax" whenever someone wants to buy or sell the tokens. The way it works is that a percentage of the tokens being bought or sold is transferred to a preset address - essentially "taxing" the buyer and seller and thus discourage wash trading. However, this code function is can be abused where the tax rate is unreasonable, making it a Honeypot.
Related Terms
Directed Acyclic Graph (DAG)
Directed acyclic graphs refers to a data structure that is built in one single direction, yet branches out and never repeats.
Decryption
The process of decrypting data that was previously encrypted (made unreable) back to a readable form.
Transactions Per Second (TPS)
It is number of transactions done per second. For example, there are 10 transactions of Bitcoin done in 1-minute. The TPS would be 10 transactions/60 seconds = ~0.17 TPS.
Central Ledger
Central data repository of a company or bank
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